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Aetna-Humana deal followed months of negotiations among major insurers

SEC filing reveals back-and-forth between Big 5 that led to merger announcement

It's no secret that the health insurance industry has been subject to a flurry of deal-making in recent months, but a new Securities and Exchange Commission filing by merging insurers Aetna and Humana offers a unique peek into the behind-the-scenes negotiating that ultimately would reshape the industry.

Aetna and Humana announced their $37 billion deal July 3, but not before Humana executives spoke to other major insurers about possible deals in months prior and along with its board of directors, weighed these overtures against Aetna's, the filing reveals.

Here are some of the events the filing highlights:

  • An insurer known as "Party A," likely UnitedHealth Group, had indicated interest in acquiring Aetna since August 2014, and made a $104-per-share offer in January 2015 to take over the insurer. But Aetna's board indicated the price "was not at an attractive level."
  • Meanwhile, in October, Humana executives met with executives from an insurer known as "Party X" (likely Cigna) in New Jersey to discuss a potential transaction.
  • Humana also held discussions with a third insurer known as "Party Y," likely Anthem, starting March 4 with a meeting in the District of Columbia between CEO Bruce Broussard and that company's CEO.
  • Humana and Aetna began negotiations when Aetna CEO Mark Bertolini invited Broussard to meet with him March 28 in Newport, Rhode Island.
  • Party X, or Cigna, made a $230 per share offer to Humana on April 25, but Humana ultimately decided in May not to accept the offer.
  • Party Y (Anthem) "publicly confirmed that it had made offers to acquire" Party X (Cigna) in June, effectively taking the companies off the table as transaction partners with either Aetna or Humana.
  • Aetna made a June 16 takeover offer to Humana for about $225 per share, which Humana rejected as too low and countered with a $240 per share bid. Aetna rejected that price, and both companies finally agreed to a $230 per share deal.

Now that Aetna and Humana's boards have both approved their deal, the companies' shareholders still must approve the acquisition, and the transaction also faces a lengthy and likely rigorous examination from state and federal regulators. The same holds true for Anthem and Cigna, which finally settled on a $54.2 billion deal in late July after Cigna rejected Anthem's first takeover bid.

To learn more:
- check out the filing

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Aetna acquires Humana for $37B
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UPDATED: Anthem tries to acquire Cigna; UnitedHealth makes bid for Aetna